Gotta love ZERO RISK in the SP500 = $$$

[beefcaketrade]

None of those talking heads got on their knees and thanked the fed for the trillions of dollars they sprinkled all over wallstreet to prop it up.... everything about this market is artificial thanks to bubble ben bernanke, yellen and all the fed friends that have bowed to wallstreet the last 9 years!!

Why would a commentator on TV get on their knees? The investors in the stock market on the long side, which may include commentators themselves, very much will thank the fed for juiciing up the markets. They're getting richer, how will they not? I don't see your point.

Markets go in cycles. And they always hit extremes on both direction swings.

According to the Shiller p/e, the dot-com bubble was more bubblicious than it is today before the recent sell-off. During the dot com era, there was no fed juicing markets. Yet the market went up in parabolic fashion. People will reason things however they see fit. And I'm not saying the fed didn't juice the markets, but the markets will do what it does. In a bull market it wants to go up until it doesn't, despite the fed. In fact, with the recent tax cut, it immediately lowers p/e for every company, making the margin even larger now before we reach the dot-com era level of overbought.

But regarding your point about gauging and fading what 'dumb money' does. 'Dumb money' is positioned on both sides of the trade. How do you fade 'dumb money' as a collective? You can't. So you cherry pick wins about fading dumb money, when in actual fact you rode a wave in a market where there were winners and losers.

People have been saying since 2013, "oh Goldman says to buy so fade it as they are herding the sheep". Except market kept going up. So they were right. And I'm sure eventually, there will be a note released by these banks that will tell clients to buy, right when the market enters an inflection point at the top, and sells off. Then they will be 'wrong' that one time. And then people like you will say 'see, that's why you fade them'. But they were right for 10 years and people losing their pants fading 'dumb money' for 10 years, but that one time where it meets their expectations and they gloat. lol. Ultimately, the point here is people will cherry pick experiences on what they want to believe. I just don't buy the argument that you try to fade what 'dumb money' thinks, when in reality the only dumb money in a market is the one who loses money.

 

[beefcaketrade]

They're saying this thing will run to 50 DMA before pause or pullback. So 2720 or so if true.

 

[i960]

Why would a commentator on TV get on their knees? The investors in the stock market on the long side, which may include commentators themselves, very much will thank the fed for juiciing up the markets. They're getting richer, how will they not? I don't see your point.

His point is that they're silent when the market is ripping but crying like they've been personally injured when the market sells off. The market doesn't guarantee shit to anyone, so that expectation shouldn't be there from the start.

 

[Visaria]

long at 520 dow future, tight stop

 

[volente_00]

Volente, what charts are you looking at? Want to take a look at the same chart if possible. Thanks!

ES

1,5,15 minute

 

[Nine_Ender]

Why would a commentator on TV get on their knees? The investors in the stock market on the long side, which may include commentators themselves, very much will thank the fed for juiciing up the markets. They're getting richer, how will they not? I don't see your point.

Markets go in cycles. And they always hit extremes on both direction swings.

According to the Shiller p/e, the dot-com bubble was more bubblicious than it is today before the recent sell-off. During the dot com era, there was no fed juicing markets.

Earnings expansion and the recent correction actually crossed the forward looking P/E on US indexes into a normal range. Given the trend, it appears that US stocks are now only marginally expensive despite the big rally last year. Not even close to a bubble. And if the US economy is truly taking off, the market will too. Time will tell.

The FED doesn't juice markets; the FED is about the economy. If someone wants to say the FED has juiced up the US economy too much and outline all the dire outcomes to US citizens then go right ahead. I just don't see it, quality of jobs and income still needs work.

 

[Saltynuts]

ES

1,5,15 minute

Haha thanks! Is there a place to find these charts updated realtime on the internet? I have interactivebrokers.com - are they on there? Never used them. Thanks!

 

[beefcaketrade]

His point is that they're silent when the market is ripping but crying like they've been personally injured when the market sells off. The market doesn't guarantee shit to anyone, so that expectation shouldn't be there from the start.

Here's the problem, it's not the same people doing the whining and being silent. Financial media has a huge Rolodex and they call people up (who's biases they know ahead of time) to appear on shows for covering whatever suits the agenda or market sentiment at the time. They will at times try to cover opinions on both sides, but of course they are more bullish biased in general like a sell side analyst. One day they can have a guy saying the market can go higher on an up day, and another day they get another guy saying buy the dip on the down day.

And of course most people they bring on, or the journalists themselves, tend to be biased to the bullish side as their own investments are at stake. Yes, the market doesn't owe anyone anything, but institutions in general cater to long investors and not speculative shorts who bet on downside. So there will always be bias in being bullish, which is pro-economic growth. And, the market is actually naturally biased to the upside over the long term anyway.

But I agree that there shouldn't be whining. These guys, like the XIV buyers, had no problem with raking in the cash on the way up, then they should take it like a man when it falls. It's part of the game.

 

[beefcaketrade]

The FED doesn't juice markets; the FED is about the economy. If someone wants to say the FED has juiced up the US economy too much and outline all the dire outcomes to US citizens then go right ahead. I just don't see it, quality of jobs and income still needs work.

But they did juice the markets by keeping rates low. Part of the rationale is to directly spur economic activity with the wealth effect during a recession in '08, while of course the main goal was to free up credit so businesses can grow. Their goal wasn't to create asset bubbles, but it is ultimately the unintended consequence that they do end up creating bubbles in asset prices by their extended period of being a dove.

Call it negligence if you want. But you keep rates low, people will do things like leverage, carry trades in financial markets, buy back stocks, etc - instead of investing in new factories or R&D. But the fed only has a few tools at their disposal. One of them are rates. They reduce it, and then people will do what they do. Have some businesses gotten cheap credit to grow their business? Sure. But then it also allows hedge funds to borrow cheap to buy stocks. You can't expect to isolate the effect rate change has to only assisting in business investments and growth, but prevent the effect from spilling over to asset price inflation. And they knew this when they lowered rates. So you can't claim that their goal wasn't to push asset prices up. They lowered rates in spite of knowing asset prices will be pushed up. So they very much own it.

 

[Visaria]

Lately there has been too much thinking on this thread.

Not enough trading.

I may make a complaint.